i agree with Post No. 5, that Iago plays on Othello's insecurities. Yet, I also think he was duped. But I do not think that Othello is a fool. Almost anyone would be duped by Iago's machinations. If someone that I had fought beside in a war, who served me in peacetime had hinted to me that my significant other might be unfaithful, I might believe him. Why would I not? We see how crafty is with other characters. He can manipulate Roderigo and Cassio so easily. It takes Iago an entire act and part of another to convince Othello that Desdemona is unfaithful. Othello does not fall easily, but he does fall. Othello is a good man. He sees good in others. Iago is aware of that fact. This brings up an important question: are good people more vulnerable because they are less suspicious than evil ones? Do we tend to judge others as we are ourselves?
I think that Othello's willingness to believe Iago results more from his own insecurities than his gullability. Shakespeare is very careful to depict Othello as an ousider (a Moor in Venice/Cyprus, a life-long military man who is unrefined and "rude" in speech, etc) from the very beginning of the play, and Othello is well aware of the fact that he's different from the other characters. Once he becomes enmeshed in Iago's lies, Othello begins to believe that Desdemona would prefer Cassio for his good looks and his youth. We obviously have evidence that Othello is a very smart man, and I'm quite certain that an experienced general in the Venetian army would be able to recognize tricks that other, more gullible people might overlook. So ultimately, I think he was duped--and Iago knew that duping Othello would be possible because of his many insecurities.
Othello was more duped than he was gullible. It was not unreasonable for him to have trust and faith in Iago because of their relationship in the military. Iago chose to play on Othello's personal weaknesses, as mentioned in above posts, so Othello was not necessarily being gullible.
Although Othello was not a weak or gullible person by nature, he was an easy mark for Iago in one respect, and Iago took full advantage of it. Othello was vulnerable to the idea that Desdemona did not truly love him and would betray him because he doubted his own value in her eyes. He assumed that she could not really love him because of who he was--a man of color. This personal insecurity was the weakness through which Iago manipulated him, playing into all of Othello's doubts and fears.
I think that he is a little of both. He is gullible in the sense that an astute military leader should have better judgment than an average citizen.
However, no one can deny that Iago is a master manipulator. He fools Cassio (also a military leader), Desdemona (an aristocratic young woman), his own wife Emilia, Roderick, Montano (a governor)--for a while, and obviously much of Venetian society to be in the position that he was in at the play's beginning. In this sense, Othello is duped, and the prejudice of his day contributed to his believing Iago; so the villain has many advantages over the hero.